The Price of CD&amp;#146;s.

Extracts from this document...

Introduction

The Price of CD's Many people believe that CD's are overpriced, but to look at the breakdown in the costs that are involved in producing a CD, the end price at which the CD will be sold to consumers can sometimes be justified. So what are the prices that are involved in producing a CD? Well the record company has to cover all costs not just those involved in the direct manufacturing. These include, the artist advance, the recording costs, the cost of the artists' promotional video's, the marketing of the artist and the CD (including press and PR), tour support and remixes. Although some of these costs are recoupable from the artist, in order for the record company to break-even and make profit, the CD's have to incorporate all of these costs. ...read more.

Middle

Twenty-eight states in the US filed suits against the five biggest record companies and two music retailing giants, accusing them of conspiring to fix CD prices. (Cisneros, O. 2000) When issues such as this are raised, it leaves the consumers to wonder whether the CD's are sold at a certain price to include all of the record company's and the retailers costs, or is it that the costs are not as expensive as they make out and they are in fact marking up their prices by a hefty sum to exploit the consumers in order for the companies involved to make excess profit. Piracy is a growing concern for the music industry. Record companies have witnessed a vast drop in their profits due to the downloading of music from the Internet, peer-to-peer file swapping and organised piracy (piracy on a mass produced scale). ...read more.

Conclusion

to rely on for profit. It can be said that the record companies are not selling their CD's at high enough prices in order to make substantial profit, and in many circumstances, any profit at all. Nielsen Media Research shows that CD sales fell by 13%, in the US, from 2001 to 2002. CD sales worldwide have fallen by 14% in the last two years. Share prices in the record companies are also falling. EMI saw their share price halved from �4 in September 2001 to �2 in September 2002. (The EMI Group, 2002) In an effort to get consumers back into the record stores, the music industry is trying an array of new sales strategies. Some new releases can be found for just under $10, while new or "developing artists" can be found for between $6.99 and $13.99. This is in addition to sales, rebates and other methods to lure the consumer back. ...read more.

cash rather than share financing by the acquiring firms is that they do not want to increase the risk of losing control after the acquisitions. Song and Walkling (1993) study a sample of 153 target firms and 153 non-target firms containing all acquisition-related announcements in the US from 1977 to 1986 to explore: (1)

1.5 Methodology 1. Examine existing accounts of the business to whether the firm has enough capital for expansion. I am going to do this by finding out the profitability, liquidity and the efficiency of the firm using ratio analysis from the Trading Profit and Loss account and the Balance Sheet.

1917 - German and Russian Gramophone Company businesses lost as a result of World War I - Columbia Phonograph renamed Columbia Graphophone 1920 1921 - Composer Sir Edward Elgar opens the first HMV shop on Oxford Street, London 1925 - Gramophone Company starts using an electrical, rather than mechanical, sound

The other pressures on industries for changes include government influences, as mentioned above. These influences come from legislation and environmental taxation. Legislation "Businesses are regulated to protect our natural resources from irreversible damage. Those with effective resources, who adopt sustainable practices, reduce waste and pollution" (The Environment Agency).